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Ethereum researchers have put forward pERC-20, a new EIP that would make privacy the default state for fungible token transfers on the network. The proposal deliberately breaks ERC-20 compatibility, stripping out the public balance and allowance concepts — no balanceOf, no approve, no allowance, no transferFrom — and replaces them with a zero-knowledge note-based interface.
Why it matters
ERC-20 has been Ethereum's default token standard for nearly a decade, and its public-by-default architecture is exactly what makes on-chain analytics firms like Nansen and Arkham so effective. Every wallet's holdings and every approval granted to a contract sits in cleartext on every full node. pERC-20 flips that: transfers become ZK notes, and balances become something only the holder can prove knowledge of. It's a structural change to how tokens behave on Ethereum, not a privacy wrapper bolted on top.
The trade-off is real — wallets, DEX frontends, indexers, and any contract that today reads balanceOf or checks allowances would need to be rebuilt or wrapped. Composability with the existing ERC-20 DeFi stack takes a hit in exchange for confidential transfers.
Market impact
For institutional and treasury users who have cited on-chain transparency as a reason to keep allocations off Ethereum, a native privacy standard answers a long-standing objection. The watch items now are wallet UX — how users actually view and prove balances without leaking them — and whether major issuers would mint under pERC-20 or stick with ERC-20 for liquidity reasons.
Frequently asked questions
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What is pERC-20 and how is it different from ERC-20?
pERC-20 is a proposed Ethereum token standard that replaces ERC-20's public balance and allowance functions with a zero-knowledge note-based interface. Transfers are private by default rather than relying on a privacy wrapper.
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Does pERC-20 keep balanceOf and allowance?
No. The proposal deliberately removes balanceOf, approve, allowance, and transferFrom, breaking ERC-20 compatibility in exchange for a confidential transfer model.
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Why would Ethereum need a privacy-native token standard?
ERC-20's public balances and allowances expose wallet holdings and contract approvals on every full node. pERC-20 addresses long-standing objections from institutional and treasury users who want confidential transfers without a bolted-on privacy layer.
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What breaks if pERC-20 is adopted?
Wallets, DEX frontends, indexers, and any contract that reads balanceOf or checks allowances today would need to be rebuilt or wrapped. Composability with the existing ERC-20 DeFi stack takes a hit.
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Is pERC-20 live on Ethereum mainnet?
No. pERC-20 is currently a research proposal published as an EIP. Adoption would require ecosystem-wide wallet and infrastructure upgrades before any token could launch under it.
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